U.S. Q4 2018 GDP growth estimated at 2.6%; 2018 GDP growth at 2.9%

Real gross domestic product (GDP) for the United States increased at an annual rate of 2.6% in Q4 2018, according to the initial estimate released by the Bureau of Economic Analysis (BEA).

The increase in real GDP in the Q4 2018 reflected positive contributions from personal consumption expenditures (PCE), non-residential fixed investment, exports, private inventory investment, and federal government spending. Those were partly offset by negative contributions from residential fixed investment, and state and local government spending.

Current-dollar personal income increased $225.1 billion in Q4 2018, compared with an increase of $190.6 billion in Q3 2018. The acceleration in personal income reflected an upturn in farm proprietors’ income and accelerations in personal dividend income and personal interest income. Compensation of employees decelerated.

Disposable personal income increased $218.7 billion, or 5.7%, in Q4 2018, compared with an increase of $160.9 billion, or 4.2%, in the Q3 2018. Real disposable personal income increased 4.2%, compared with an increase of 2.6%.

Personal saving was $1.06 trillion in Q4 2018, compared with $996.0 billion in Q3 2018. The personal saving rate which is personal saving as a percentage of disposable personal income was 6.7% in Q4 2018, compared with 6.4% in the Q3 2018.

2018 GDP

Real GDP increased 2.9% in 2018 (from the 2017 annual level to the 2018 annual level), compared with an increase of 2.2% in 2017.

The increase in real GDP in 2018 primarily reflected positive contributions from PCE, non-residential fixed investment, exports, federal government spending, private inventory investment, and state and local government spending that were slightly offset by a small negative contribution from residential fixed investment. Imports, which are a subtraction in the calculation of GDP also increased.

The acceleration in real GDP from 2017 to 2018 primarily reflected accelerations in non-residential fixed investment, private inventory investment, federal government spending, exports, and PCE, and an upturn in state and local government spending that were partly offset by a downturn in residential investment.

Current-dollar GDP increased 5.2%, or $1.02 trillion, in 2018 to a level of $20.50 trillion, compared with an increase of 4.2%, or $778.2 billion, in 2017.

During 2018 (measured from Q4 of 2017 to Q4 of 2018), real GDP increased 3.1%, compared with an increase of 2.5% during 2017. The price index for gross domestic purchases increased 2.1% during 2018, compared with an increase of 1.9% during 2017.